Hong Kong could have at least 1.8 million fewer Taiwanese visitors under liberalised air-travel arrangements between the mainland and Taiwan. Travel and retail leaders in the SAR have warned that the proposed new travel arrangements - approved in principle by Beijing last week - could impact their industries. They said the number of Taiwanese visitors to Hong Kong could be significantly reduced as they would merely stop over at Chek Lap Kok, hardly spend and shop in Hong Kong and proceed to their destinations in China. The first step in the new arrangements will see chartered flights from Taiwan to Shanghai and Beijing during the Lunar New Year holiday and the trend toward direct links was seen as inexorable. 'If fewer visitors from Taiwan visit Hong Kong, the retail industry will undoubtedly be affected and we can't afford this,' said Hong Kong Retail Management Association chairman Yu Pang-chun. The Hong Kong Tourist Board (HKTB) said that 2.02 million Taiwanese travellers passed through Hong Kong between January and October, with 76.7 per cent - or 1.67 million - proceeding to other destinations on the same day. Dao Heng Securities analyst Eric Yuen warned that Taiwanese travellers would skip Hong Kong or Macau once direct cross-strait links were established. 'If this new travel arrangement takes effect, Hong Kong and Macau will suffer a significant drop in air traffic and this can have a serious impact on the retail and travel industries in both jurisdictions,' he said. Between 80 and 90 per cent of air passenger traffic through Macau airport is from Taiwan. A spokesman for Kwang Hwa Information and Cultural Centre, Taiwan's representative office in Hong Kong, said coach operators carrying visitors from the airport to cross-border destinations probably would be affected most. This was because the majority of Taiwanese took these buses to China, largely for business purposes, immediately after passing through Hong Kong's customs, he said. Capturing tourist dollars from Taiwan probably would depend on the 2005 opening of Disneyland, he said. Gogo Bus Management, the largest airport coach company operating between Chek Lap Kok and southern China, said its business would not be affected in the short term as Taiwan chartered flights would fly only to Shanghai and Beijing. 'But most Taiwanese are going to Dongguan and Guangzhou for business and they will still take our buses across the border,' said spokesman Johnson Chu. He believed direct flights were at least three years away. Taiwanese made up 85 per cent of the firm's customers, he said. The company makes 50 trips a day to southern China and has 70,000 passengers per month.